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The Globe and Mail

Roaming Canadians taking costly wireless hits

Canadians pay some of the highest wireless-data roaming rates in the world when they travel beyond North America, according to a new report.

The report, from the Organization for Economic Co-operation and Development's science and technology arm, compares wireless data charges when consumers use devices outside their home countries.

Canada had the most expensive roaming rates in the world for using a megabyte of wireless data in one session - essentially double the OECD average of $13.52 (U.S.).

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It is not uncommon for Canadian travellers to get text messages from Canadian carriers, such as BCE Inc., upon arriving in another country, advising them that they will be charged anywhere from $10 to $25 (Canadian) for each megabyte of data used to check e-mails or browse the Web.

"There's no question that there's a direct correlation with the lack of competition we've long had in the marketplace," said Michael Geist, a University of Ottawa law professor who studies digital issues in Canada. "Perhaps that will change over time, with some of the new carriers. But, for the moment, the dominant [wireless]providers have felt they're in a position to charge rates far in excess of what other providers charge."

The report looked at a variety of scenarios. When Canadians travel to the United States and Mexico, roaming rates compare more favourably with rates in other countries, the report found.

The study also looked at how consumers use their phones when outside their home country. It found that a Canadian smart-phone user who consumed 3.5 megabytes of data over five separate sessions in a week would pay roughly $71.46 (U.S.), compared with about $69 for a U.S. customer and about $27 for a user in the United Kingdom.

Telus Corp.'s vice-president of mobility marketing Brent Johnston said he "absolutely agrees" with the OECD report's findings about high prices in Canada, and blamed it on the previous monopoly Rogers had on international roaming deals (because Bell and Telus used a wireless technology that differed from most international carriers, unlike Rogers).

Mr. Johnston said wireless providers could still make a profit by cutting roaming charges considerably. He said Telus would announce a significant price reduction before the summer travel season.

"Dropping [the price]more than 50 per cent on data still allows us to be profitable," Mr. Johnston said in an interview. He said that as a relative newcomer to international roaming, Telus would have less sway than Rogers in negotiating lower international roaming rates with wireless carriers around the world.

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Mr. Johnston said Telus will change the structure of its roaming plans, noting that the current model - in which wireless users have to call the company and order new packages for roaming - is overly complicated.

Wireless competition has dramatically changed the market for voice services in Canada, but it has done little to change the market for wireless data. Although new carriers such as Wind Mobile and Mobilicity offer data plans with unlimited downloading, many of the country's flagship wireless providers continue with similar wireless data pricing as before; the large carriers are using data charges to compensate for dramatically declining voice revenues.

The OECD report, which examined the average prices of two wireless operators in a given country, was released in late May.

The Canadian industry has long questioned the value of international comparisons, particularly OECD reports, saying the data are flawed and prices in Canada reflect the huge geographic area carriers must cover while reaping revenues from only a small populace.

Previous OECD reports on Canadian wireless pricing have drawn angry reactions from the country's major carriers, which are anxious about their image in a sector that is subject to government regulation. It was the impression of high prices and a lack of competition that persuasion the Conservative government to licence a slew of new competitors in 2008.

Mr. Geist said there's a reason Europeans pay lower rates: Because travel between countries is more common, many carriers sell their phones "unlocked" and carriers have a vested interest in keeping roaming rates low to ensure their customers continue to use their devices. He added that it is more likely that rates will come down through increasingly available alternatives to expensive roaming, such as using voice-calling applications such as Skype on a smart phone hooked up over a local WiFi network.

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